Lithium Battery Pack Prices To Fall From $209 Per kWh Now To <$100 By 2025

Lithium Battery Pack Prices To Fall From $209 Per kWh Now To <$100 By 2025 (source: Bloomberg New Energy Finance)

According to the Bloomberg New Energy Finance, who surveyed more than 50 companies, lithium-ion battery prices are today cheaper than ever.

Chevrolet Bolt EV 60 kWh Battery

The indicatedcurrent price stands at $209 per kWh, on the pack level.

The price provided by BNEF is 24% lower than one given a year ago, and just about a fifth of what it was in 2010.

But the good news doesn’t end there. It’s expected that by 2025 battery prices will decrease below $100 per kWhon the pack level.

That should enable the selling of plug-in electric vehicles without a premium, but still with all the benefits of cheap energy to drive.

“That’s a magic number for the electric car business. According to BNEF analyst James Frith, $100 is widely seen as “a tipping point in the adoption of EVs.”

“The price estimates are based on a BNEF survey of more than 50 companies, and their decline reflects a rise in battery manufacturing and “the economies of scale that come with it,” the report shows. Developers of stationary storage systems — like the kind that back up rooftop solar panels — can expect to pay 51 percent more than automakers because of much lower order volumes.”

66 responses to "Lithium Battery Pack Prices To Fall From $209 Per kWh Now To <$100 By 2025"

Extrapolation is always a dangerous game but unless they’re predicting some massive change in the learning rate of battery production 20% compound year on year price reductions would get you there around 3 years from now not 7.

I believe this is not true. More ore less, only the battery represents the new techology in the world of automotive industry. The powertrain and the rest of the car does not represent anything new in the electronic or automotive industry. Only adaptations of existing technologies.

I agree with this. I can’t see any reason why the cost of non-EV-specific components should be higher.

But I do believe that the cost of developing an EV model, homologating it in many markets, designing the production line, working out the supply chain logistics, marketing and selling the thing represents a significant cost per vehicle when 30,000 or so are made per year. Especially so if the car is not adapted from an existing model.

Nissan took seven years to sell 300k of the LEAF and by 2013 made it in Japan, the UK, and the US. Obviously the investments made in the LEAF have some value when they finally redesigned the car (especially considering that the 2018 has the same chassis as before and is not quite the “second gen” product it is touted to be, AFAIU).

To get a ballpark estimate: Nissan reportedly spent more than $5 billion on getting the LEAF to market. Divide by 300,000 cars and you get an investment of (more than) $16,667 per vehicle. If they had sold “just” half a million vehicles per year and the model had lived “only” five years instead of seven, those five billion would be divided on 2.5 million cars instead of just 0.3, and the cost would be about $2,000 per car. (Granted, you cannot scale infinitely without building more factories, but 500k per year in total at the 3 plants Nissan uses to build the LEAF actually doesn’t seem so crazy!)

Add to this the benefits ICE cars enjoy today that come from there being many different models that share the same platform, and from many decades of optimizing the whole system, and I think it should be very clear that EVs have a lot of scope for lower cost just from economies of scale.

Battery prices and inverters and electric motors and DC-to-DC converters, power axles with all of this as an integrated solution, and all the EV-specific components, have even greater scope for cost reductions since here the component volume is also very low (compared to ICE). And on top of all this, more and more places are more and more likely to increase the price or limit the ability to emit CO2 and NOx. I’m convinced that sometime before 2030, it will be socially unacceptable to drive a fossil-fuelled car, in much the same way that smoking wherever one feels like is today. If you light up a cigarette in other people’s home without explicit permission, you immediately pay a price, socially. And some day we will similarly be asking what right people have to emit exhaust gasses into our atmosphere. That cultural change will be a very powerful incentive for those who refuse to embrace the new technology…

Nothing fundamentally new, but many components are not standardized and shared, and when capital costs for design, testing, production line setup need to be applied to small number of products, it gets expensive.

Cost reductions in other components will come and will help but they are much smaller than battery improvements. $209/KWH * 70KWH battery, the battery cost is $14,630! That is the most expensive part of the car.

Reductions in charger, motor, & controller prices will help but not nearly as much as battery cost reductions.

I think BNEF has the future stationary pack costs vs EV pack costs exactly backwards. Stationary packs will be much lower cost than EV packs on a kW and kWh basis. They are simpler and have and can be built cheaper because of the following:

Volume: Same as above. Volume is not an issue. The least-expensive cell chemistries can be used. They don’t have to be squeezed into “skateboards”. Also, the cells can be configured in much larger modules or packs or packs as befits multi-megaMW-hr type installations.

recycled cells: Going forward, the stationary market will be a prime target for recycled used EV pack cells. Many pack manufacturers already have that in their game plan.

High volume: Who will be making the stationary packs? The same manufacturers who make the mobile cells and packs. Tesla/Panasonic. LG. Samsung. And they know the BIG future market, in total GWh/year of cell requirements, will be STATIONARY, not mobile. With PV and wind growing so fast, the utilities are in a heck of a bind unless they start installing some major GWh of battery packs to smooth out the bumps pronto.

Also, stationary BMS, chargers/inverters, bus bars, all that will be less expensive per kWh than EVs when working at multi-1000 volt level and at the multi-MW pwer level.

The better model for projecting the relative future cost is comparing residential PV installations per-kW vs utiility-level PV installations. A lot fewer installations at the utility level, but the per-kW costs are a fraction of the residential level installs.

George, I wouldn’t be surprised if you’re going more granular than BNEF. In some ways that team is inspiring with the data they bring to the energy sector. In others, Bloomberg puzzles me. This was a survey of 50 purchasers, which doesn’t mean everyone is volunteering their costs accurately, for one. I also signed in to review this content, which didn’t give access to the report (just a bigger summary). There was also a Bloomberg prepared EV video running in the background, that grossly over-simplifies EVs as not selling because gas went down. We know plug-in sales are doing great, next to hybrids, despite the ugliness, the lack of sales support and usual BS Bloomberg avoids about as much as the Wall Street Journal.

They just seem behind the curve, whether deliberate or not. I also don’t understand the storage claim, that buyers of (xx)MWh scale have to pay 1.5X the auto-sector? Maybe these orders are smaller, but do we need to reach much past MWh(s) to get inside a 50% premium??

That seems to be the general trend in reports about EV batteries, both on the cell level and the pack level, from sites like Bloomberg which don’t focus on EVs.

I don’t know why they always seem to be relying on data which is years out of date, but they do. Perhaps in this case, the claim of $209/kWh at the pack level, isn’t as outdated as most of these reports are. But I think they are, as you say, still behind the curve.

There was a report that Tesla had pack-level costs of ~$180, and I think that was at least a year ago by now. We can be pretty sure Gigafactory One costs are significantly lower; or at least, that they will be as soon as Tesla finishes straightening out the production mess there.

Yeah, but $100 range in 2025. Not in a year of two. Maybe $100 at the cell level and $140 at the pack level by 2020, as we discussed.
Regarding TMS, whether liquid or solid electrolyte, there is internal resistance, which at the high-kw charge rates will still turn into appreciable heat in a very tight volume that just has to be removed. But maybe with higher allowable cell temperatures, passive conductive inter-cell plates to a passive (or no-moving-part heat-pipe-based) exterior thermal sink might work OK.

The problem with recycled cells is I’m not convinced the automotive EV market is large enough to produce cells in any significant numbers. EVs are a tiny fraction of the market right now and most of the EVs produced still are on the road and will be for a few years.

It seems like the stationary power market might realistically need more batteries than EVs in coming years, so how can recycled batteries even make a dent. Eventually EV batteries will trickle down, but I’m thinking it’s decades before it makes a big difference.

Perhaps more importantly, for most applications, stationary storage packs don’t require as much power (on the cell level) as BEV battery packs do. Compared to the amount of energy stored, the power required from grid-level storage banks is relatively low. No doubt there are exceptions for systems intended to react instantly to prevent grid collapse in an emergency, but in most cases the amount of power delivered from such systems should be relatively low in comparison to the energy stored. Stationary packs don’t need to accelerate a car from 0-60 in just a few seconds!

Reduced need for power on the cell level should also reduce costs for stationary storage systems.

These batteries have a very low number of cycles. 500 vs 5,000 for LiFePO4. Also a 100 Ah 3.2 v LiFePO$ has a very low internal resistance. 0.5 m Ohm. What this means is that the power that this cell can give is 3.2 / 0.5e-3 = 6,400 Amps. That is 20 kW. That is in theory. In practice it is less. It also means that these batteries charge much faster. What the automotive boys do is raise the voltage of the battery to sub 400 volts to get enough power. The bottom line is that these batteries are cheaper when you calculate the cost of the kWh over the number of cycles. These automotive batteries are just lighter and almost has the same foot print. The LiFePO4 do not catch fire but nearly all other automotive batteries do.

> can expect to pay 51 percent more than automakers because of much lower order volumes

IMO, that’s ridiculous. Lower *order* volumes do NOT make it much more expensive to fulfill the orders. The *production* volume – i.e. the *total* order volume – is what drive the economies of scale here.

A small manufacturer of toasters does not have to pay 50% more for relays than a huge manufacturer. It is slightly more expensive to handle the small orders than the large one, and that overhead results in a slightly higher price per unit – but not a massively higher price.

An interesting data point (of course, not one we should generalize too widely from):
The MSRP price of a Bolt battery pack as a spare part is $15.7K.
As this is a 60kWh (usable) pack, that translates into $262/kWh, not bad at all; again, this is _retail_ price, not cost to GM, and I’m sure they’re not subsidizing it in any way — they have no reason to do so.

(*)Currently on sale for $12.3K, if anyone wants to keep a spare on hand, just in case (-:
If you use the on-sale price as the metric, this battery is priced at $205/kWh retail, below the median cost to manufacturers acc. to the BNEF survey.

That was what LG Chem was (and perhaps still is) charging GM for the cells. It’s not GM’s pack-level price.

You can probably add 25-35% to that for the pack-level price. That’s still lower than Bloomberg’s estimate for $209/kWh. It seems fairly certain that LG Chem has the lowest prices on EV li-ion batteries of anybody, with the possible exception of Tesla, because LG keeps getting new large orders faster than anybody else.

It’s an impressive drop, and bodes well for the future. However, 24 kWh is too little for EVs to gain mass market acceptance. I’d say 200 mile range is the minimal required amount, which means all the battery improvements so far have only succeeded in getting battery capacity up to the necessary amount.

In that vein, EVs are still effectively as expensive as they were before, they’re just more capable. (Yes low range EVs are cheaper, but those will never sell to the public at large.)

According to the plot, battery prices were $800/kWh in 2011 – a $19,200 battery. Still expensive, but probably true. The 2011 Leaf started at $35k, remember. By the time Nissan shipped a 30kWh battery (2016), they had dropped to about $300/kWh. That’s only a $9,000 battery.

The Leaf did not include TMS hence you must back out the cost of that From BNEF’s model. I believe they are now claiming a third of the pack cost but in 2011 that was probably closer to 20-25% meaning 14-16K. Nissan was also building their own cells and packs so you have to back out the profit margins and some overhead of the manufacturer.

Also, a Nissan Exec said in 2011 that they projected they were going to start making an overall profit on the Leaf only in the third year of production, possibly with the expectation that their unit costs would come down on battery packs by then. (Unit costs would come down over time on a lot of auto parts, but especially for BEV battery packs.) Compare to the average car model, which is expected to start making an overall profit after the first year of production.

So even if it looks like the Leaf would have cost too much in 2010-2011 for Nissan to put it into production, that may not be the case. It seems that Nissan simply accepted a higher cost for development, and also a higher per-unit cost. Or at least, it looks that way to me.

Unlikely or not, there’s little doubt Nissan initially sold the LEAF at far below cost. Obviously Nissan understands a thing or two about economies of scale and expected costs to come down fast. In fact, Carlos Ghosn has said in a keynote or two that Nissan thought it would happen faster than it did.

In a long term gambit, a huge corporation may choose to make a strategic move that costs them in the short term, if they believe it will give them a longer-term advantage. Nothing really mysterious abou that.

Having said that, I do agree that these prices seem consistently too high. Based on what Tesla has claimed about per-kWh cost at the battery pack level, and on the deal GM got from LG, at the cell level, it is hard to believe that others or SO far behind (especially since they all buy from the same, small set of suppliers) as to make the average as high as reported in these analyses.

As you point out in another comment above, a lot of the cost of an EV is in the fixed costs of R&D, testing, production line setup, supply chain setup, homologation etc. which typically gets amortized over few sales compared to most ICE models.
Given that, I don’t think it makes sense to talk about “losing money on each car” ( on the original Leaf or the current Bolt or any other EV) without explicitly listing all the assumptions one makes about fixed-cost amortization.
If you intended to say that the marginal “profit” on each Leaf sold was negative — that is, cost of components & assembly was more than the ASP, I don’t believe that for a second.

“Obviously Nissan understands a thing or two about economies of scale and expected costs to come down fast. In fact, Carlos Ghosn has said in a keynote or two that Nissan thought it would happen faster than it did.”

I think that’s right; that the Leaf becoming profitable happened slower than Nissan expected. I don’t think Nissan foresaw that it would have to build auto assembly factories and battery factories in the UK and in Tennessee to be able to satisfy demand for the Leaf and to sell it at a profit.

Of course, the disruption in the supply chain caused by the 2011 tsunami in Japan, was also a factor in driving up costs. At the time, Nissan’s only source for Leaf batteries (and probably a lot of other car parts) was in Japan.

If we had more chargers drivers would feel comfortable with smaller packs. So add some chargers by 2025 and see if everyone still needs 300+ mile range. Even if the batteries are affordable you get the situation where you are adding batteries just to haul batteries.

+1. Required range is inversely proportional to the deployment of chargers to remote locations.

I commented on WA state’s plan for the use of VW Dieselgate money and stated that charger deployment must include every county of our state and not exclusively deploy chargers to heavily populated areas.

“If we had more chargers drivers would feel comfortable with smaller packs. So add some chargers by 2025 and see if everyone still needs 300+ mile range.”

My opinion is 180° away from yours.

Gasmobiles have, almost universally, a gas tank big enough to carry them 300+ miles, regardless of how big or small the car is. In other words, the size of the gas tank is typically scaled to the size of the car, and car buyers prefer cars with 300+ miles of range.

If every BEV could be recharged in 5 minutes and there was a DCFC station every five miles everywhere, car buyers would still prefer their cars to have a range of 300+ miles.

The fact that currently it takes 30-45 minutes for an 80% charge en-route, only makes the need for larger battery packs even more important. Larger packs not only will carry a BEV farther without needing a charge, they also can be charged faster at a fast-charge station.

I think those saying that large battery packs will become unneeded (or at least less important) in the future, are ignoring the facts (and the physics) pretty firmly.

I think 200 miles is the border of acceptability. Once you hit 300 miles, all the improvements can go into cost reduction. While people like more range on an ICE car, a big part of that is so they don’t have to visit the gas station unnecessarily often. That’s obviously not a concern for most EVs, at least those who have home charging available.

I don’t believe that sub 200 mile EVs will ever sell to the public at large. You can make whatever logical arguments you want, but people simply will not listen.

Also as an owner of two sub 100 mile EVs, I can tell you the range is insufficient. I manage to get around just fine, but I do feel I’m making a sacrifice that wouldn’t be there in a 200 mile EV (maybe even 150 mile).

I only consider chargers as a fallback if I’m pushing the limits of my range. I hope to never have to use a public charger simply because it’s too time consuming. But in an emergency at least I won’t have to call for a tow.

I can tell you in a few years time when it comes to replace these cars I won’t be in the market for a sub 200 mile EV (maybe I’ll settle for 150 for a good price, but no lower than that) And this is coming from someone who is a hardcore EV advocate.

Don’t know where you read that. I recall $100 being considered “the magic number” for many years. It’s been less clear if this was cell cost or battery pack cost (which is weird since only the latter ultimately matters).

In any case it is a sticker price consideration, and it seems to me it utterly fails to take account of the fact that a major reason EVs are more expensive is the low volume.

Excluding the battery, a typical power level is about $4k cheaper per car to implement with an EV powertrain than an ICE one. Less power tends to decrease that saving, more power tends to increase it.

In total cost terms many EVs are already very competitive with ICE, at least in markets with incentives.

“So $100 is the new bogey? Not long ago, wasn’t $200 considered the tipping point? When we get to $100, they people will put down EVs until they get to $50?”

Not to say you don’t have a point, but a pack-level cost of ~$200 was sufficient for GM to put the Bolt EV into production, and other auto makers are following suit, even if not very rapidly.

Part of the reason we’re not seeing more movement towards making long-range BEVs is the fact that battery makers are not building out supply in advance of demand; they’re waiting until they have signed contracts in hand before building out supply to meet those contracts. This is why Tesla spent billions of dollars building Gigafactory One; to ensure a supply of batteries which it — and not its partner Panasonic, or some other battery maker — would control. It’s the same reason Ford built the River Rouge industrial complex, to supply its production of the Model T.

Eventually, battery supply will likely increase to the point that EV makers won’t have to build their own factories, just as the auto parts supply industry eventually grew large enough that Ford largely abandoned its River Rouge complex in favor of buying parts from outside suppliers.

But in the near term, only those EV makers which control their own battery supply are going to be able to rapidly grow the number of long-range BEVs that they manufacture. At the moment, that’s only BYD and Tesla. We’ll see how soon other EV manufacturers join them — or, if they don’t, we’ll see how soon those other auto makers either go out of business or, like BlackBerry after the iPhone stole most of its business, shrink down to producing only pale shadows of their former market shares.

“What is the ‘no processing done, straight from the mine’ material cost for 1kwh of battery cells?

“If the raw material cost is over $100/kwh, then there’s no way to get manufactured cell cost under $100/kwh.”

From articles I’ve read which address this specific issue, nobody can answer that question. No battery manufacturer is starting entirely with raw materials; they’re all using materials which have some pre-processing. And since the cost of processing in many or most cases far outweighs the actual raw material costs, there is plenty of potential there for reducing materials cost, even aside from improving energy density so they can store more energy in the same amount of materials.

You’ll see a lot of articles on the internet which claim the cost for “raw” materials is so high that it’s impossible to drop the price of li-ion batteries substantially. Every one of those articles is wrong.

Materials processing is very difficult to separate from materials cost… In addition, the materials-processing cost changes dramatically with different materials and can therefore be considered material-specific. However, new processing techniques can lower the current high cost of raw materials.

(Source linked below. Those interested in this subject should read the entire extensive article; it’s quite informative, altho it’s from 2008 so much of the info on prices is outdated.)

I think the term “raw materials” is misused in that citation, but hopefully my gentle readers will get the point.

Tesla is supposedly doing more in-house processing of materials at Gigafactory One (see flow chart linked below), but even there, they’re not starting 100% from raw materials.

Even if this is the case how are they going to be selling the long range semi for $200k when the battery pack cost will be well in excess of $100k in 2020?

Either Tesla isn’t going to be making a profit, and likely will be taking a loss, or these guys are wrong. Here’s to hoping the latter as cheaper batteries are what’s needed to make EVs more of a reality.

800 kWh at $100 is 80k. A normal diesel sells for ~100k and the Tesla for 180k.

So the same profit as a regular semi truck.
*tada*

By the way, the $209 per kWh is not accurate. The whole chart is like a year or two behind what is actually happening.
Tesla are most likely closer to $130 kWh at pack level today.
Not that any of the companies would tell us exactly where they are at (except GM a couple of years back until they got angry calls from their battery manufacturer for revealing their price for cells. 😉 )

The whole survey looks hokey to me. First they say they got their information from 50 companies. Can you think of 50 companies that build or buy automotive grade power packs? I can’t, so they must be including a lot of small players in their survey. Are these prices average? If so how? Just the average price quoted by the 50 companies, or weighted according to their volume? Large volume users like Tesla, Nissan, GM etc. will pay a lot less than the average price. Second nobody except small players are going to quote anything except retail price, that is LG Chem or Panasonic will tell you the price you can buy at, not the price they sell to GM or Tesla. Car companies will not tell true price, they want to keep it secret from their competitors. The big players are probably working at half the price of that chart. The real “tipping point” is about $50. Who thinks a 100kWhr pack at $10.000 cost is going to make an EV price competitive with an ICE equivalent? Even a reasonably high performance engine/transmission wholesale cost is about $3,000.

So if the Bolt’s battery is about 12K today, that means it still costs 25K without the battery? I thought battery prices were the only thing separating EV’s from gas cars price wise, why is it still so much more expensive than a compact gas car?

1. Because the development costs (R&D and tooling up) for an auto maker to make a car model radically unlike anything it’s ever made before, is much higher than for it to develop another gasmobile similar to ones it’s already making.

2. Economy of scale favors old tech. Makers of gasmobiles have had more than a century to figure out how to make them cheaply, and there are a lot of auto parts suppliers competing for the business, which means lower prices.

All things being equal, it should cost substantially less to produce a BEV than a comparable gasmobile. But guess what? In the real world, all things are never equal!

As the volume of production EVs increases, and as automobile makers gain experience in building mass produced BEVs, we’ll see manufacturing costs and therefore prices come down, with more and more suppliers making parts specifically for BEVs.

$150/kWh at the pack level is doable for 2020, but everyone is trying to figure out how to get to $100/kWh pack level. Cells likely need to drop to $70-80/kWh which will come slowly and painfully as chemistry improves and volume increases.

This is false news. In the beginning of 2017, bloomberg said that battery prices were $230 / KWh and in the last 1 year did the battery price fall by only $21 / KWh. I am sure it should be below $180 / KWh. All the mainstream media has ganged up against main electric auto companies especially Tesla. Expect to get more such false news.

I think that’s a bit unfair. While Bloomberg does often show a mild amount of anti-EV bias, all the figures we’ve seen reported for industry average EV battery prices are only estimates. And as several commenters here have already pointed out, neither battery makers nor EV makers give out the exact prices for batteries; they all hold that as trade secrets.

Is the real average price lower than what Bloomberg is reporting here? Yeah, almost certainly it is. But I don’t think we should castigate them from using the actual figures their survey indicates, even if we have reason to suspect the veracity of the figures they were given from industry sources.

However, it does seem proper to “ding” them for not stating that actual average costs and prices are probably somewhat lower than their survey indicates.

Lithium batteries are used not only for plugin vehicles, but also for
Laptops
Tablet computer
Smartphones
Power tools
Cameras
Energy storage
and many other products.

Whether all battery makers hold the prices to different customers secret?

If that is the case, then bloomberg need not publish the price especially the drop from $230 / KWh to $209 / KWh in 2017 which is absurdly false given the fact that 1.2 million plugin vehicles + billions of those gadgets were made and sold.

If everyone keeps quiet, then in 2018, they may even publish that the battery prices have increased.